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SCCA Magazine |
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Was it a non-responsive bid
or a non-responsible bidder? |
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Contractors’
expectations are
often
disappointed by
rejections of
their lowest
bids in favor of
a higher bid
from a
competitor when
the public
entity declares
the lowest bid
is
non-responsive
or the bidder is
non-responsible.
But there is an
important
distinction
between the two
that impacts the
bidder’s
rights. In order
to avoid a loss
of due process
and,
potentially,
award of a
public works
project, it’s
important for
contractors to
understand their
rights, and act
quickly.
The
law requires a
public entity to
provide a
contractor a due
process hearing
when the public
entity rejects
the contractor’s
bid on the
basis that the
contractor is
non-responsible.
However, there
is no right to a
due process
hearing when the
public entity
has merely
found the
contractor’s bid
to be
non-
responsive.
Unfortunately,
to avoid the due
process hearing
requirement,
public entities
have been known
to notify
bidders that
their bids
were
non-responsive,
when, in fact,
the public
entity had
determined
that the lowest
bid contractor
was
non-responsible.
In a recent
case, Great West
Contractors v.
Irvine Unified
School District,
the Court of
Appeal said that
an erroneous
characterization
of a bid as
non-responsive
when the bidder
has, in fact,
been found
non-responsible,
allows public
entities to
“circumvent
public
contracting
statutes and
do so without
affording [the
affected] bidder
a hearing.”
Non-responsive
bid or
non-responsible
bidder?
What
is the
difference
between a
non-responsive
bid and a
non-responsible
bidder, and how
can you tell
which is the
actual reason a
bid was
rejected?
According to the
appellate court,
a general rule
of thumb is
that
responsiveness
can usually be
determined by
looking
solely at the
bid and the bid
request, without
resort to any
additional
information,
references, or
past
performance.
If the bid
offers to build
exactly what the
bid package
requests, the
bid is
responsive. If
the bid varies
from the bid
request, it is
non-responsive.
For example, if
the bid package
requests
acquisition
of a particular
system by
purchase only,
and the bid
offers to
lease the system
to the public
entity, the bid
is
non-responsive
and may be
rejected without
a due process
hearing.
If,
however, the
contractor’s bid
offers to build
exactly what was
requested,
and the bid is
rejected as
non-responsive,
it is possibly
an attempt by
the public
entity to
circumvent the
Public Contract
Code and
award the
contract to a
favored
contractor for
illegitimate
reasons.
Responsibility
generally
requires a
public entity to
investigate
facts and
circumstances
that are not
apparent on the
face of the bid,
assessing the
reputation of
the bidder,
among other
factors. Public
Contract Code
1103 defines a
“responsible
bidder” as “a
bidder who
has demonstrated
the attribute of
trustworthiness,
as well as
quality,
fitness,
capacity and
experience to
satisfactorily
perform the
public works
contract.”
Because a
finding of
non-responsibility
can adversely
affect the
contractor’s
public image and
cause damage
beyond the
rejection of
its bid on the
project at
issue, due
process requires
the public
entity to
notify the
contractor and
provide an
opportunity for
the contractor
to respond and
rebut the
finding.
Lowest bid
contractors
whose responsive
bids are
rejected as
non-responsive
should promptly
seek legal
advice if they
think the
rejection of the
bid was
improperly
characterized to
avoid a due
process hearing.
-By Eric N. Kibel, senor
associate with
Lanak & Hanna.
He can be
reached at (714)
550-0418 or
www.lanak-hanna.com
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